The project investigates the causes and consequences of high inflation. On the causes side, it focuses on two key factors: expansionary fiscal policy since the onset of the pandemic, and global supply bottlenecks, particularly through their impact on global value chains. These elements likely contributed to the recent inflation surge. On the consequences side, the project examines how uncertainty about the persistence of inflation affects monetary policy decisions and interest rates, aiming to improve our understanding of how such uncertainty shapes the broader economic cycle.